IAB: $9.6B In Internet Advertising Revenues for 1st Quarter of 2013

Consumers worldwide are in a constant process of being bombarded left and right by advertising; be it print, television, or signage, people are rarely able to escape the grasp of both corporate giants and local businesses as they go about their daily routine. In fact, it’s getting to the point that many people simply tune out the bombardment of passive advertising confronted with each day, ignoring billboards driven past in cars and quickly thumbing through full-page ads attempting to divert them from the latest celebrity gossip at the newsstand.

However, one area where advertising is not only surviving but growing and thriving is online; clearly Internet advertising, by its inherently adaptable and interactive nature, is finding itself far more compelling to a much wider array of the populace; a populace that is finding itself turning more and more to the ease and convenience of the internet with web-enabled devices such as smartphones and tablets. Herein lies the future of advertising; and the future, reports show, is now.

The Interactive Advertising Bureau (IAB) and PwC U.S. have released the results of an extensive survey revealing that that United States digital advertising revenues achieved a record number in the first quarter of 2013 with an astounding $9.6 billion. To put that number into perspective, the amount of digital advertising revenues generated in the U.S. in the first quarter of 2012 was $8.3 billion; that’s a 15.6 percent jump in the span of just one year. Clearly, businesses are sitting up and taking notice that the internet is a critical component of any effective, modern advertising strategy.

In his Ad Age.com article entitled Advertising Will Change Forever, Josh Bernoff speaks about the fact that digital marketing, despite the restraints of a deep national recession, has moved beyond its experimental beginnings and firmly taken roots in the collective consciousness of modern Americans and usurped traditional print channels formerly used by businesses to get the word out about their products and services.

“Now it looks more like advertising is inefficient, relative to digital,” he said. “More than half of the marketers we surveyed said that effectiveness of direct mail, TV, magazines, outdoor, newspapers, and radio would stay the same or decrease within the next three years. In contrast, well over 70% expected the effectiveness of channels like social media, online video, and mobile marketing to increase. The result is that digital, which was about 12% of overall advertising spend in 2009, is likely to grow to 21% or more within five years. Along the way overall advertising budgets won’t grow much. This is huge.”

Google has become one of the biggest corporate entities in the world. Its finger is on the pulse of each and every aspect of business and, as stated in an interview with their chief business officer Nikesh Arora, the company expects that 50 percent of all ad expenditures will divert online within the next five years, with print suffering the most from the inevitable switch to the more cutting-edge, interactive medium provided by digital delivery methods.

“Advertising is very simple in a lot of ways,” she said. “Advertisers go where the users go, and users are choosing to spend a lot more time online. Look at the adoption of tablets. Tablets have beautiful screens and can be interactive, so I think a lot of traditional print is being moved to being read on tablets. So the users are moving really, really fast, and the advertisers need to catch up and move to where the users are.”

Even former internet provider giant-turned media content generator AOL has experienced a jump in advertising revenue recently. Despite losing a great deal of money in many of its other business ventures, including their Patch series of hyper-local news sites, advertising earnings for AOL increased nine percent to $359.2 million; that includes a six percent gain in domestic display advertising.

According to an eMarketer forecast, even massive online retailer Amazon’s worldwide ad revenue is expected to reach $835 million in 2013, up 37 percent from $610 million in 2012; $450 million of those 2012 ad dollars were earned in the United States, and the monies from that vital market are expected to increase to approximately $1.1 billion by 2015.

When looking at the overall online and digital advertising market, however, the numbers continue to not only encourage but astound; Marketingcharts.com reports that, in 2013, online ad spend growth is expected by industry analysts to meet or exceed 11.5 percent, and is further expected to grow even more in 2014 by yet another 12 percent.

The numbers don’t lie- it’s more than obvious millions and millions of potential customers for your business are embracing the digital frontier in favor of print or television, and that more and more money can be expected to be earned via interactive online advertising. The market has grown significantly and continues to do so…good business is where you find it, and going forward, that business is online.

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Google knows you, your friends, your likes, what entertains you, where you are in the world at any given time. Google will soon predict your next action, your next thought, based on a collaboration of thoughts past. - John Colascione

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